Budgeting for an Around-the-World Trip

Many have asked me and Tim before and during our travels, “How can you afford to take a trip around the world, and what does your budget look like?”

Tim and I each saved for a little over 2 years for this trip, with the goal being to have $35,000 per person in reserve for this trip, plus some additional in our savings accounts to help us get back on our feet when we get home in December.

We landed at the total of $35,000 each based on some brief internet research that led us to between $30,000 and $40,000 as an average for a 10 to 12 month trip. We adjusted this number at a high-level to account for the fact that we each had 750,000 Marriott Rewards points (the equivalent of about 50 rewards nights in Marriott hotels) and enough Delta miles to redeem them for a first class ticket around the world, all accrued from our days of traveling for our jobs.

Many people then ask us at this point in the story, “What is an around the world ticket?”. Basically, it is a single ticket you can purchase through partnered airlines (on Delta, it is the Sky Team Alliance which includes AirFrance, AeroMexico, and other international brands) that will take you from a start point around the world in a single direction (east to west or west to east) with a certain number of segments or miles traveled allowed on the fare. With the Round the World Reward ticket, we are allowed a certain number of stop-overs, and we pay only the taxes on the flights. On our ticket, for 280,000 reward miles each, we booked first class flights from Chicago, United States, to Lima, Peru; Lima, Peru to Santiago, Chile; Santiago, Chile to London, United Kingdom; Rome, Italy to Bangkok, Thailand; Bangkok, Thailand to Sydney, Australia, and Sydney, Australia to Minneapolis, United States. This alone saved us thousands of dollars in flight costs.

With the general limit of how much we wanted to spend in mind, I read a book called “How to Travel the World on $50 a Day” by Matt Kepnes (known as Nomadic Matt on the travel blogs), which outlined how much one can expect to spend on average in various regions of the world per day. In general, South America and South East Asia cost less per day, while Europe and Australia are more expensive. Using these numbers as guidelines, I then put together a high-level itinerary of the number of days we would plan to spend in each region/country and simply multiplied this out by the estimates from Nomadic Matt’s book.

We also needed to consider the cost of travel insurance (separate from our medical insurance at home), which we used insuremytrip.com to sign up for at about $400 each for the full year.

The last thing we did before totaling up an overall budget to see how we compared to our $35,000 goal was to identify big ticket and expensive excursions or tour experiences we wanted to prioritize, as well as necessary flights or other expensive transport that would not be included in our Round the World ticket. For us, this included a cruise to Antarctica (the most expensive part of our trip by far, at nearly $9,000 per person on its own), scuba diving certification in Thailand, and a trip into the Sahara desert, for example. We also included the cost of our unlimited 90 day Eurail Pass for unlimited rail travel in Europe in this estimate.

Within this budget, we did not include costs of clothing and supplies we would need for the trip, but you can see details on those costs in the first post in this section on Travel Tips.

This led to the following breakdown:
January 23- April 14 in South America: $15,043 (including the cost of the Antarctica cruise)
April 14- August 1 in Europe and Morocco: $7,377
August 1- October 23 in South East Asia: $4,314
October 24- December 4 in Australia: $5,000
This brought us to a total for our estimate of $31,734 per person.

Now that we are 5 months into our trip, we realize we have under-budgeted for Europe, as we are finding it very difficult to stay within the budget and will almost certainly end up over budget by about $1,000 per person. It was easy to stay on budget in South America, because you can eat out and enjoy a lot of activities for very low cost. We have since revisited our South East Asia and Australia itineraries and budgets to make them more accurate and feel confident that the numbers above better reflect how much we will actually spend than they did in my initial research 8 months ago.

I hope this information is somewhat helpful in giving you and idea on how much you may plan to spend on trips to various regions and can be a starting point as you plan your own trip!